WPI inflation unchanged at around 1% in August, gives RBI room for rate cut

Food inflation rises, but core turns into deflation, prompting rate cut hope

The wholesale price index (WPI) inflation rate remained stagnant at 1.08 per cent in August, versus the previous months, even as food items saw a higher rate of increase in prices.

However, there was core deflation (belonging to manufactured products, minus food products) after a gap of 34 months in August, raising hopes of RBI rate cuts.

The movement in WPI inflation rate was different from its CPI counterpart. The CPI inflation rate rose to 3.21 per cent in August from 3.15 per cent in July.

This was so because food items have more than 45 per cent weight in CPI, while it